The Tragedy of Austerity

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Aug 042013

There’s a very good book by David Stuckler & Sanjay Basu ‘The Body Economic – Why Austerity Kills‘. Rather than attacking the problems of the Great Recession from a business or a moral point of view, the authors instead drawn on their expertise as healthcare statistical analysis experts. They provide examples of different recessions at different points in recent economic history and compare the impact of austerity policies on the health of the people who are affected by them. Russia as a post-Soviet experiment when it attempted to ‘Shock’ capitalism into the former state controlled economic system. Thailand following the Asian Economic Crisis of the 1990s, and America, Europe and Iceland following the great crash of 2008.

They come to a pretty stark conclusion, that “Ultimately austerity has failed because it is unsupported by sound logic or data. It is an economic ideology. It stems from the belief that small government and free markets are always better than state intervention. It is a socially constructed myth – a convenient belief among politicians taken advantage of by those who have a vested interest in shrinking the role of the state, in privitising social welfare systems for personal gain. It does great harm – punishing the most vulnerable, rather than those who caused recession”.

Read this book and then ask yourself how social democrats in the United Kingdom can better challenge the austerity-nutters who are running the British economy and ripping-up our social provision, and leaving more people to fend for themselves.

Plan B? Who are Osborne’s Supporters Now?

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Jul 192012

Osborne Out of His Depth?

With each announcement of financial news it is becoming clear that the austerity plan irrationally beloved by the coalition is failing. Now the IMF is calling on George Osborne to go to Plan B to save the British economy from it’s present stall. According to the Daily Telegraph “The IMF said that the British economy may not be able to cope with the scale of austerity planned for 2013-14. It argued in its latest staff report on the UK that the Government has room to relax its deficit cutting programme with targeted tax cuts and increased infrastructure spending should it prove necessary.”

According to The Guardian the IMF report makes clear that “the coalition’s austerity has exacerbated the weakness, wiping 2.5% off GDP since 2010.” But as the Daily Mail points out “Ministers rejected calls for a plan B to revive the economy in June, after leading economists warned the Chancellor was not doing enough to promote growth.” The Mail points out that “Forty-seven economists wrote a letter to the Observer newspaper demanding changes to the Coalition’s economic policy, claiming the UK’s finances are too unstable to withstand the spending cuts.” But that “The Treasury and senior Cabinet ministers said at the time that there was no need for a change of course and put the blame squarely on Labour’s shoulders for leaving the country with a record deficit.”

How much longer can the coalition go on blaming anyone and everyone other than their own failed policies. Remember in May 2010 the British economy, according to The Guardian, was bounding back from recession with growth in the first quarter of 2010 rising at 0.3% – more than the UK economy has grown for the last twelve months. It’s time that Osborne got a new job – but based on this record, would you employ him?